New India Assurance Told To Pay Senior Citizen Rs 6.92 Lakh Over Rejected Car Claim

The Delhi State Consumer Commission ordered New India Assurance to pay Rs 6.92 lakh after finding that suspicion over a car accident and its insured value did not prove fraud.

A senior citizen spent more than two years pursuing a car insurance claim after his vehicle was damaged in a foggy night-time accident. New India Assurance rejected the claim, questioning whether the accident had happened as described and whether the car’s insured value was inflated.

The Delhi State Consumer Disputes Redressal Commission has directed the insurer to pay Rs 6,92,450, including the insured amount and compensation for related expenses. The order followed the policyholder’s appeal against a district commission ruling that awarded the insured amount but did not decide his other claims.

Insurer Questioned Accident And Insured Value

The car was insured with New India Assurance from December 19, 2020, to December 18, 2021, with an Insured Declared Value (IDV) of Rs 5,49,450.

According to the complaint, the policyholder’s son was driving towards Salasar on December 31, 2020. With other routes reportedly blocked during the farmers’ agitation, he took the Bahadurgarh-Jhajjar road. At around 11.30 pm, he stopped to clean the windscreen because of heavy fog and poor visibility. An unidentified truck allegedly hit the parked car from behind, pushing it into a roadside culvert. According to a recent report by The Indian Express, the truck's registration number could not be noted.

The insurer appointed a surveyor in January 2021. The policyholder said he submitted documents, responded to queries and repeatedly asked for updates, but the claim remained unresolved before it was rejected.

The insurer questioned the accident account, citing the reported absence of visible signs at the scene, a nearby hotel owner’s reported lack of knowledge, and the fact that no one was injured. It also argued that the nearly 15-year-old car’s market value was much lower than its IDV.

Commission Says Suspicion Alone Was Not Proof

The state commission found no evidence that the policyholder had deliberately made a false declaration to secure an undue benefit. New India Assurance had accepted the premium and issued the policy with the specified IDV. If it believed the declared value was incorrect, the commission said, it should have examined the issue when issuing or renewing the policy.

It also held that the circumstances cited by the insurer did not conclusively show that the accident had not occurred. The absence of injuries, the unidentified truck and questions about the scene were not enough, on their own, to establish fraud. The commission criticised the delay in handling the claim and the insurer’s repeated requests for clarification without a decision within a reasonable time.

The district commission had ordered payment of Rs 5,49,450 in February 2025 but had not addressed the policyholder’s remaining demands. Allowing his appeal, the state commission directed the insurer to pay Rs 18,000 for parking charges, Rs 50,000 for mental agony and harassment, Rs 50,000 for inconvenience and expenses arising from the unavailability of the car, and Rs 25,000 in litigation costs, in addition to the insured amount.

The ruling turned on the evidence in this dispute: the commission found that the insurer had not substantiated its allegations of misrepresentation or fraud.

FAQs

How much was New India Assurance ordered to pay?
The Delhi State Consumer Commission directed the insurer to pay Rs 6,92,450, including the car’s Rs 5,49,450 insured value and compensation and expenses.

Why did the commission reject the insurer’s fraud argument?
It found that the insurer had not provided sufficient evidence of misrepresentation. The circumstances it cited did not, by themselves, prove that the accident had not occurred.

What was the car’s insured declared value?
The car’s IDV was Rs 5,49,450. The commission said the insurer had accepted the premium and issued the policy at that value.